Deutsche Bank cuts GlaxoSmithKline to 'sell', says valuation alone is not enough

In a research note sent to clients, they explained that GSK's fourth quarter financials and outlook had been weaker than their already cautious stance.

Deutsche had previously had the shares at 'hold'. The broker also cut its target price on the stock from 1,400.0p to 1,150.0p.

A further proviso was that valuation was not enough to justify an investment and in any case offered limited support, given how shares in several of GSK's large global peers were also trading on single digit valuation multiples.

In order to be just "vaguely constuctive", one one need to believe that growth was set to rebound in 2022 and that the risk-reward trade-off around the catalyst for the firm's interim research and development pipeline was "attractive".

Deutsche said its confidence was "limited" on both fronts.

"2022 confidence relies on growth being deferred rather than lost, which is non-obvious (we can easily envisage a scenario in which pandemic disruption sees launches/Shingrix constrained into 2022 [...])."